Business Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Business Segment Information

Note 2—Business segment information:

Business segment	Entity	% controlled at September 30, 2016
Chemicals	Kronos	80	%
Component products	CompX	87	%
Waste management	WCS	100	%
Real estate management and development	BMI and LandWell	63% - 77	%

Our control of Kronos includes 50% we hold directly and 30% held directly by NL. We own 83% of NL. Our control of CompX is through NL. We own 63% of BMI.  Our control of LandWell includes the 27% we hold directly and 50% held by BMI.  

	Three months ended September 30,						Nine months ended September 30,
	2015			2016			2015			2016
	(unaudited)
	(In millions)
Net sales:
Chemicals	$	336.5		$	356.1		$	1,061.8		$	1,030.6
Component products		26.5			28.4			83.3			82.6
Waste management		9.9			13.6			34.9			29.9
Real estate management and development		10.3			8.7			28.1			15.8
Total net sales	$	383.2		$	406.8		$	1,208.1		$	1,158.9
Cost of sales:
Chemicals	$	293.7		$	281.1		$	896.1		$	860.6
Component products		18.4			19.0			57.5			56.5
Waste management		13.3			14.1			37.8			39.4
Real estate management and development		8.0			7.3			21.3			12.9
Total cost of sales	$	333.4		$	321.5		$	1,012.7		$	969.4
Gross margin:
Chemicals	$	42.8		$	75.0		$	165.7		$	170.0
Component products		8.1			9.4			25.8			26.1
Waste management		(3.4	)		(.5	)		(2.9	)		(9.5	)
Real estate management and development		2.3			1.4			6.8			2.9
Total gross margin	$	49.8		$	85.3		$	195.4		$	189.5
Operating income (loss):
Chemicals	$	(1.3	)	$	30.1		$	24.8		$	45.8
Component products		3.4			4.4			11.4			11.5
Waste management		(8.3	)		(5.1	)		(19.3	)		(23.0	)
Real estate management and development		1.2			.3			2.6			(5.1	)
Total operating income (loss)		(5.0	)		29.7			19.5			29.2
General corporate items:
Securities earnings		6.5			6.8			19.9			20.5
Insurance recoveries		.1			.1			3.5			.4
General expenses, net		(10.0	)		(9.1	)		(29.4	)		(29.2	)
Interest expense		(14.4	)		(15.9	)		(43.5	)		(47.4	)
Income (loss) before income taxes	$	(22.8	)	$	11.6		$	(30.0	)	$	(26.5	)

Segment results we report may differ from amounts separately reported by our various subsidiaries due to purchase accounting adjustments and related amortization or differences in the way we define operating income. Intersegment sales are not material.  Our Real Estate Management and Development Segment’s operating loss in the first nine months of 2016 includes a first quarter $5.1 million contract related intangible asset impairment which is included in the determination of its operating income, see Note 7.  Our Chemicals Segment’s operating income in the first nine months of 2016 includes $3.4 million in business interruption insurance proceeds which is included in the determination of its operating income, see Note 12.